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Loans Receivable And Allowance For Loan Losses | 3 Months Ended
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Mar. 31, 2012
Loans Receivable And Allowance For Loan Losses [Abstract] |
Loans Receivable And Allowance For Loan Losses |
7. |  | Loans Receivable and Allowance for Loan Losses
The following is a summary of loans receivable by major category:
|  | March 31, 2012 |  |  | December 31, 2011 |
|  | (In thousands) |
Loan portfolio composition |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |
Residential |  | $ | 1,995 |  |  | $ | 2,043 |
Commercial & industrial |  |  | 2,626,530 |  |  |  | 2,631,880 |
Construction |  |  | 48,064 |  |  |  | 44,756 |
Total real estate loans |  |  | 2,676,589 |  |  |  | 2,678,679 |
Commercial business |  |  | 846,307 |  |  |  | 849,576 |
Trade finance |  |  | 152,704 |  |  |  | 146,684 |
Consumer and other |  |  | 64,095 |  |  |  | 66,631 |
Total loans outstanding |  |  | 3,739,695 |  |  |  | 3,741,570 |
Less: deferred loan fees |  |  | (2,496 | ) |  |  | (2,744 | )
Gross loans receivable |  |  | 3,737,199 |  |  |  | 3,738,826 |
Less: allowance for loan losses |  |  | (62,309 | ) |  |  | (61,952 | )
Loans receivable, net |  | $ | 3,674,890 |  |  | $ | 3,676,874 |
Our loan portfolio is made up of four segments: real estate loans, commercial business, trade finance and consumer and other. These segments are further segregated between our loans accounted for under the amortized cost method (referred to as "legacy" loans) and loans acquired from Center Financial (referred to as "acquired" loans), as acquired loans were originally recorded at fair value with no carryover of the related allowance for loan losses. The acquired loans are further segregated between Credit Impaired Loans (ASC 310-30 loans acquired with the credit deterioration) and performing loans (pass graded loans acquired from Center at the time of merger). The following table presents the outstanding principal balance and the related carrying amount of the acquired Center Financial loans included in our Consolidated Statements of Condition at March 31, 2012 and December 31, 2011:
|  | March 31, 2012 |  |  | December 31, 2011 |
|  | (In thousands) |
Outstanding principal balance |  | $ | 1,327,898 |  |  | $ | 1,458,133 |
Carrying amount |  |  | 1,229,410 |  |  |  | 1,347,525 |
The following table presents changes in the accretable discount on the acquired Credit Impaired Loans in the Center merger for the dates indicated:
|  | (In thousands) |
Balance at January 1, 2011 |  | $ | 0 |
Center merger |  |  | 32,872 |
Accretion |  |  | (873 | )
Balance at December 31, 2011 |  |  | 31,999 |
Accretion |  |  | (3,561 | )
Changes in expected cash flows |  |  | 1,350 |
Balance at March 31, 2012 |  | $ | 29,788 |
The activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2012 is as follows:
|  | Legacy |  |  | Acquired |
|  | Real Estate |  |  | Commercial Business |  |  | Trade Finance |  |  | Consumer and Other |  |  | Real Estate |  |  | Commercial Business |  |  | Trade Finance |  |  | Consumer and Other |  |  | Total |
|  | (In thousands) |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period |  | $ | 39,040 |  |  | $ | 20,681 |  |  | $ | 1,786 |  |  | $ | 445 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 61,952 |
Provision (credit) for loan losses |  |  | (1,317 | ) |  |  | 1,627 |  |  |  | (23 | ) |  |  | 548 |  |  |  | 1,254 |  |  |  | 477 |  |  |  | 16 |  |  |  | 18 |  |  |  | 2,600 |
Loans charged off |  |  | (1,934 | ) |  |  | (1,362 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (14 | ) |  |  | (47 | ) |  |  | 0 |  |  |  | (25 | ) |  |  | (3,382 | )
Recoveries of charged offs |  |  | 20 |  |  |  | 645 |  |  |  | 60 |  |  |  | 17 |  |  |  | 303 |  |  |  | 87 |  |  |  | 0 |  |  |  | 7 |  |  |  | 1,139 |
Balance, end of period |  | $ | 35,809 |  |  | $ | 21,591 |  |  | $ | 1,823 |  |  | $ | 1,010 |  |  | $ | 1,543 |  |  | $ | 517 |  |  | $ | 16 |  |  | $ | 0 |  |  | $ | 62,309 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 6,624 |  |  | $ | 8,434 |  |  | $ | 1 |  |  | $ | 479 |  |  | $ | 673 |  |  | $ | 241 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 16,452 |
Collectively evaluated for impairment |  |  | 29,185 |  |  |  | 13,157 |  |  |  | 1,822 |  |  |  | 531 |  |  |  | 56 |  |  |  | 276 |  |  |  | 16 |  |  |  | 0 |  |  |  | 45,043 |
Loans acquired with credit deterioration |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 814 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 814 |
Total |  | $ | 35,809 |  |  | $ | 21,591 |  |  | $ | 1,823 |  |  | $ | 1,010 |  |  | $ | 1,543 |  |  | $ | 517 |  |  | $ | 16 |  |  | $ | 0 |  |  | $ | 62,309 |
Loans outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 55,448 |  |  | $ | 27,423 |  |  | $ | 4,702 |  |  | $ | 624 |  |  | $ | 10,770 |  |  | $ | 821 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 99,788 |
Collectively evaluated for impairment |  |  | 1,737,254 |  |  |  | 530,484 |  |  |  | 132,926 |  |  |  | 21,424 |  |  |  | 725,865 |  |  |  | 211,926 |  |  |  | 14,108 |  |  |  | 17,931 |  |  |  | 3,391,918 |
Loans acquired with credit deterioration |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  |  |  |  |  | 147,252 |  |  |  | 75,653 |  |  |  | 968 |  |  |  | 24,116 |  |  |  | 247,989 |
Total |  | $ | 1,792,702 |  |  | $ | 557,907 |  |  | $ | 137,628 |  |  | $ | 22,048 |  |  | $ | 883,887 |  |  | $ | 288,400 |  |  | $ | 15,076 |  |  | $ | 42,047 |  |  | $ | 3,739,695 |
The activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2011 is as follows:
|  | Legacy |  |  |  |
|  | Real Estate |  |  | Commercial Business |  |  | Trade Finance |  |  | Consumer and Other |  |  | Total |
|  | (In thousands) |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period |  | $ | 36,563 |  |  | $ | 24,930 |  |  | $ | 192 |  |  | $ | 635 |  |  | $ | 62,320 |
Provision (credit) for loan losses |  |  | 7,195 |  |  |  | (1,705 | ) |  |  | (22 | ) |  |  | (206 | ) |  |  | 5,262 |
Loans charged off |  |  | (3,082 | ) |  |  | (2,113 | ) |  |  | 0 |  |  |  | (115 | ) |  |  | (5,310 | )
Recoveries of charged offs |  |  | 234 |  |  |  | 659 |  |  |  | 0 |  |  |  | 175 |  |  |  | 1,068 |
Balance, end of period |  | $ | 40,910 |  |  | $ | 21,771 |  |  | $ | 170 |  |  | $ | 489 |  |  | $ | 63,340 |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 10,651 |  |  | $ | 7,839 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 18,490 |
Collectively evaluated for impairment |  |  | 30,259 |  |  |  | 13,932 |  |  |  | 170 |  |  |  | 489 |  |  |  | 44,850 |
Total |  | $ | 40,910 |  |  | $ | 21,771 |  |  | $ | 170 |  |  | $ | 489 |  |  | $ | 63,340 |
Loans outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 79,142 |  |  | $ | 29,866 |  |  | $ | 460 |  |  | $ | 170 |  |  | $ | 109,638 |
Collectively evaluated for impairment |  |  | 1,498,889 |  |  |  | 478,104 |  |  |  | 57,064 |  |  |  | 12,465 |  |  |  | 2,046,522 |
Total |  | $ | 1,578,031 |  |  | $ | 507,970 |  |  | $ | 57,524 |  |  | $ | 12,635 |  |  | $ | 2,156,160 |
As of March 31, 2012 and December 31, 2011, we had a liability for unfunded commitments of $686 thousand and $686 thousand, respectively. For the three months ended March 31, 2012 and 2011, we recognized provision for credit losses related to our unfunded commitments of $0. Individually impaired loans were as follows:
|  | March 31, 2012 |  |  | December 31, 2011 |
|  | (In Thousands) |
With Allocated Allowance |  |  |  |  |  |  |  |
Without charge-off |  | $ | 79,838 |  |  | $ | 67,202 |
With charge-off |  |  | 628 |  |  |  | 341 |
With No Allocated Allowance |  |  |  |  |  |  |  |
Without charge-off |  |  | 13,138 |  |  |  | 8,123 |
With charge-off |  |  | 6,184 |  |  |  | 6,383 |
Allowance on Impaired Loans |  |  | (16,452 | ) |  |  | (18,035 | )
Impaired Loans, net of allowance |  | $ | 83,336 |  |  | $ | 64,014 |
Average Impaired Loans |  | $ | 89,398 |  |  | $ | 93,627 |
|  | For the Three Months Ended March 31, |
|  | 2012 |  |  | 2011 |
|  | (In Thousands) |
Interest income recognized during impairment |  | $ | 823 |  |  | $ | 991 |
Interest income recognized during impairment represents the related amount of interest income recognized during the time within the period that the loans were impaired. The following table details the amount of our impaired loans by class with no related allowance for loan losses, as well as the amount of impaired loans for which there is a related allowance for loan losses as of March 31, 2012 and December 31, 2011. Loans with no related allowance for loan losses have adequate collateral securing their carrying value, and in some circumstances, have been written down to their current carrying value, which is based on the fair value of the collateral.
|  | As of March 31, 2012 |
|  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |
|  | (In Thousands) |
With Related Allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real Estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 2,563 |  |  |  | 2,529 |  |  |  | (1,179 | ) |  |  | 2,518 |
Hotel & Motel |  |  | 22,762 |  |  |  | 22,553 |  |  |  | (3,351 | ) |  |  | 18,064 |
Gas Station & Car Wash |  |  | 5,449 |  |  |  | 5,389 |  |  |  | (1,310 | ) |  |  | 3,286 |
Mixed Use |  |  | 5,120 |  |  |  | 5,108 |  |  |  | (162 | ) |  |  | 3,156 |
Industrial & Warehouse |  |  | 5,265 |  |  |  | 5,254 |  |  |  | (405 | ) |  |  | 4,371 |
Other |  |  | 12,564 |  |  |  | 12,527 |  |  |  | (890 | ) |  |  | 8,166 |
Real Estate - Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,346 |
Commercial Business |  |  | 26,269 |  |  |  | 26,187 |  |  |  | (8,675 | ) |  |  | 20,990 |
Trade Finance |  |  | 442 |  |  |  | 440 |  |  |  | (1 | ) |  |  | 994 |
Consumer and Other |  |  | 479 |  |  |  | 479 |  |  |  | (479 | ) |  |  | 96 |
|  | $ | 80,913 |  |  | $ | 80,466 |  |  | ($ | 16,452 | ) |  | $ | 62,987 |
With No Related Allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real Estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 1,622 |  |  |  | 1,591 |  |  |  | 0 |  |  |  | 2,984 |
Hotel & Motel |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,046 |
Gas Station & Car Wash |  |  | 928 |  |  |  | 924 |  |  |  | 0 |  |  |  | 1,767 |
Mixed Use |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,136 |
Industrial & Warehouse |  |  | 5,684 |  |  |  | 5,663 |  |  |  | 0 |  |  |  | 3,444 |
Other |  |  | 2,977 |  |  |  | 2,970 |  |  |  | 0 |  |  |  | 6,023 |
Real Estate - Construction |  |  | 1,723 |  |  |  | 1,710 |  |  |  | 0 |  |  |  | 2,733 |
Commercial Business |  |  | 2,063 |  |  |  | 2,057 |  |  |  | 0 |  |  |  | 4,598 |
Trade Finance |  |  | 4,285 |  |  |  | 4,262 |  |  |  | 0 |  |  |  | 1,523 |
Consumer and Other |  |  | 145 |  |  |  | 145 |  |  |  | 0 |  |  |  | 157 |
|  | $ | 19,427 |  |  | $ | 19,322 |  |  | $ | 0 |  |  | $ | 26,411 |
Total |  | $ | 100,340 |  |  | $ | 99,788 |  |  | ($ | 16,452 | ) |  | $ | 89,398 |
|  | As of December 31, 2011 |
|  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |
|  | (In Thousands) |
With Related Allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real Estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 1,810 |  |  |  | 1,810 |  |  |  | (668 | ) |  |  | 3,475 |
Hotel & Motel |  |  | 17,439 |  |  |  | 17,441 |  |  |  | (4,093 | ) |  |  | 14,581 |
Gas Station & Car Wash |  |  | 2,266 |  |  |  | 2,265 |  |  |  | (550 | ) |  |  | 2,825 |
Mixed Use |  |  | 2,828 |  |  |  | 2,822 |  |  |  | (128 | ) |  |  | 1,953 |
Industrial & Warehouse |  |  | 4,262 |  |  |  | 4,242 |  |  |  | (407 | ) |  |  | 4,826 |
Other |  |  | 14,870 |  |  |  | 14,982 |  |  |  | (4,630 | ) |  |  | 6,192 |
Real Estate - Construction |  |  | 127 |  |  |  | 128 |  |  |  | (49 | ) |  |  | 2,504 |
Commercial Business |  |  | 19,413 |  |  |  | 19,416 |  |  |  | (7,168 | ) |  |  | 22,929 |
Trade Finance |  |  | 4,528 |  |  |  | 4,497 |  |  |  | (342 | ) |  |  | 906 |
Consumer and Other |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
|  | $ | 67,543 |  |  | $ | 67,603 |  |  | $ | (18,035 | ) |  | $ | 60,191 |
With No Related Allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real Estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real Estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 1,388 |  |  |  | 1,391 |  |  |  | 0 |  |  |  | 4,485 |
Hotel & Motel |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,770 |
Gas Station & Car Wash |  |  | 288 |  |  |  | 287 |  |  |  | 0 |  |  |  | 2,621 |
Mixed Use |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,868 |
Industrial & Warehouse |  |  | 2,651 |  |  |  | 2,662 |  |  |  | 0 |  |  |  | 2,380 |
Other |  |  | 2,102 |  |  |  | 2,092 |  |  |  | 0 |  |  |  | 8,934 |
Real Estate - Construction |  |  | 1,721 |  |  |  | 1,710 |  |  |  | 0 |  |  |  | 3,283 |
Commercial Business |  |  | 5,737 |  |  |  | 5,740 |  |  |  | 0 |  |  |  | 5,191 |
Trade Finance |  |  | 469 |  |  |  | 467 |  |  |  | 0 |  |  |  | 759 |
Consumer and Other |  |  | 150 |  |  |  | 150 |  |  |  | 0 |  |  |  | 145 |
|  | $ | 14,506 |  |  | $ | 14,499 |  |  | $ | 0 |  |  | $ | 33,436 |
Total |  | $ | 82,049 |  |  | $ | 82,102 |  |  | $ | (18,035 | ) |  | $ | 93,627 |
The following table presents the aging of past due loans as of March 31, 2012 and December 31, 2011 by class of loans:
|  | As of March 31, 2012 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater than 90 Days Past Due |  |  | Total Past Due |  |  | Non-accrual loans |  |  | Total Delinquent loans |  |  | Greater than 90 days and accruing |
|  | (In Thousands) |
Legacy Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 34 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 34 |  |  | $ | 0 |  |  | $ | 34 |  |  | $ | 0 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 606 |  |  |  | 273 |  |  |  | 0 |  |  |  | 879 |  |  |  | 2,979 |  |  |  | 3,858 |  |  |  | 0 |
Hotel & Motel |  |  | 228 |  |  |  | 0 |  |  |  | 0 |  |  |  | 228 |  |  |  | 487 |  |  |  | 715 |  |  |  | 0 |
Gas Station & Car Wash |  |  | 377 |  |  |  | 2,881 |  |  |  | 0 |  |  |  | 3,258 |  |  |  | 1,934 |  |  |  | 5,192 |  |  |  | 0 |
Mixed Use |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 805 |  |  |  | 805 |  |  |  | 0 |
Industrial & Warehouse |  |  | 358 |  |  |  | 0 |  |  |  | 0 |  |  |  | 358 |  |  |  | 3,054 |  |  |  | 3,412 |  |  |  | 0 |
Other |  |  | 745 |  |  |  | 118 |  |  |  | 0 |  |  |  | 863 |  |  |  | 7,810 |  |  |  | 8,673 |  |  |  | 0 |
Real estate - Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial business |  |  | 745 |  |  |  | 542 |  |  |  | 0 |  |  |  | 1,287 |  |  |  | 11,065 |  |  |  | 12,352 |  |  |  | 0 |
Trade finance |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Consumer and other |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 624 |  |  |  | 624 |  |  |  | 0 |
Subtotal |  | $ | 3,093 |  |  | $ | 3,814 |  |  | $ | 0 |  |  | $ | 6,907 |  |  | $ | 28,758 |  |  | $ | 35,665 |  |  | $ | 0 |
Acquired Loans (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 79 |  |  |  | 8 |  |  |  | 2,047 |  |  |  | 2,134 |  |  |  | 0 |  |  |  | 2,134 |  |  |  | 2,047 |
Hotel & Motel |  |  | 990 |  |  |  | 15 |  |  |  | 0 |  |  |  | 1,005 |  |  |  | 6,341 |  |  |  | 7,346 |  |  |  | 0 |
Gas Station & Car Wash |  |  | 1,467 |  |  |  | 146 |  |  |  | 3,206 |  |  |  | 4,819 |  |  |  | 384 |  |  |  | 5,203 |  |  |  | 3,206 |
Mixed Use |  |  | 1,392 |  |  |  | 1,564 |  |  |  | 19 |  |  |  | 2,975 |  |  |  | 0 |  |  |  | 2,975 |  |  |  | 19 |
Industrial & Warehouse |  |  | 3 |  |  |  | 5 |  |  |  | 32 |  |  |  | 40 |  |  |  | 3,028 |  |  |  | 3,068 |  |  |  | 32 |
Other |  |  | 639 |  |  |  | 623 |  |  |  | 4,529 |  |  |  | 5,791 |  |  |  | 705 |  |  |  | 6,496 |  |  |  | 4,529 |
Real estate - Construction |  |  | 0 |  |  |  | 0 |  |  |  | 6,363 |  |  |  | 6,363 |  |  |  | 0 |  |  |  | 6,363 |  |  |  | 6,363 |
Commercial business |  |  | 1,036 |  |  |  | 513 |  |  |  | 1,335 |  |  |  | 2,884 |  |  |  | 371 |  |  |  | 3,255 |  |  |  | 1,335 |
Trade finance |  |  | 100 |  |  |  | 13 |  |  |  | 0 |  |  |  | 113 |  |  |  | 0 |  |  |  | 113 |  |  |  | 0 |
Consumer and other |  |  | 633 |  |  |  | 243 |  |  |  | 726 |  |  |  | 1,602 |  |  |  | 348 |  |  |  | 1,950 |  |  |  | 726 |
Subtotal |  |  | 6,339 |  |  |  | 3,130 |  |  |  | 18,257 |  |  |  | 27,726 |  |  |  | 11,177 |  |  |  | 38,903 |  |  |  | 18,257 |
TOTAL |  |  | 9,432 |  |  |  | 6,944 |  |  |  | 18,257 |  |  |  | 34,633 |  |  |  | 39,935 |  |  |  | 74,568 |  |  |  | 18,257 |
(1) | The acquired loans include credit impaired loans (ASC 310-30 loans) and performing loans (pass graded loans acquired from Center at the time of merger).
|  | As of December 31, 2011 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater than 90 Days Past Due |  |  | Total Past Due |  |  | Non-accrual loans |  |  | Total Delinquent loans |  |  | Greater than 90 days and accruing |
|  | (In Thousands) |
Legacy Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 36 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 36 |  |  | $ | 0 |  |  | $ | 36 |  |  | $ | 0 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 431 |  |  |  | 0 |  |  |  | 0 |  |  |  | 431 |  |  |  | 2,612 |  |  |  | 3,043 |  |  |  | 0 |
Hotel & Motel |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 482 |  |  |  | 482 |  |  |  | 0 |
Gas Station & Car Wash |  |  | 634 |  |  |  | 0 |  |  |  | 0 |  |  |  | 634 |  |  |  | 1,368 |  |  |  | 2,002 |  |  |  | 0 |
Mixed Use |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 822 |  |  |  | 822 |  |  |  | 0 |
Industrial & Warehouse |  |  | 360 |  |  |  | 0 |  |  |  | 0 |  |  |  | 360 |  |  |  | 3,055 |  |  |  | 3,415 |  |  |  | 0 |
Other |  |  | 0 |  |  |  | 119 |  |  |  | 0 |  |  |  | 119 |  |  |  | 10,865 |  |  |  | 10,984 |  |  |  | 0 |
Real estate - Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 127 |  |  |  | 127 |  |  |  | 0 |
Commercial business |  |  | 1,396 |  |  |  | 392 |  |  |  | 0 |  |  |  | 1,788 |  |  |  | 11,462 |  |  |  | 13,250 |  |  |  | 0 |
Trade finance |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 117 |  |  |  | 117 |  |  |  | 0 |
Consumer and other |  |  | 5 |  |  |  | 0 |  |  |  | 0 |  |  |  | 5 |  |  |  | 150 |  |  |  | 155 |  |  |  | 0 |
Subtotal |  |  | 2,862 |  |  |  | 511 |  |  |  | 0 |  |  |  | 3,373 |  |  |  | 31,060 |  |  |  | 34,433 |  |  |  | 0 |
Acquired Loans (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 147 |  |  |  | 64 |  |  |  | 1,675 |  |  |  | 1,886 |  |  |  | 0 |  |  |  | 1,886 |  |  |  | 1,675 |
Hotel & Motel |  |  | 0 |  |  |  | 45 |  |  |  | 0 |  |  |  | 45 |  |  |  | 0 |  |  |  | 45 |  |  |  | 0 |
Gas Station & Car Wash |  |  | 2,547 |  |  |  | 177 |  |  |  | 817 |  |  |  | 3,541 |  |  |  | 0 |  |  |  | 3,541 |  |  |  | 817 |
Mixed Use |  |  | 1,178 |  |  |  | 1,702 |  |  |  | 389 |  |  |  | 3,269 |  |  |  | 0 |  |  |  | 3,269 |  |  |  | 389 |
Industrial & Warehouse |  |  | 3,393 |  |  |  | 0 |  |  |  | 110 |  |  |  | 3,503 |  |  |  | 0 |  |  |  | 3,503 |  |  |  | 110 |
Other |  |  | 1,472 |  |  |  | 228 |  |  |  | 4,237 |  |  |  | 5,937 |  |  |  | 0 |  |  |  | 5,937 |  |  |  | 4,237 |
Real estate - Construction |  |  | 0 |  |  |  | 4,499 |  |  |  | 0 |  |  |  | 4,499 |  |  |  | 0 |  |  |  | 4,499 |  |  |  | 0 |
Commercial business |  |  | 1,747 |  |  |  | 1,402 |  |  |  | 9,125 |  |  |  | 12,274 |  |  |  | 0 |  |  |  | 12,274 |  |  |  | 9,125 |
Trade finance |  |  | 0 |  |  |  | 0 |  |  |  | 202 |  |  |  | 202 |  |  |  | 0 |  |  |  | 202 |  |  |  | 202 |
Consumer and other |  |  | 705 |  |  |  | 370 |  |  |  | 700 |  |  |  | 1,775 |  |  |  | 0 |  |  |  | 1,775 |  |  |  | 700 |
Subtotal |  | $ | 11,189 |  |  | $ | 8,487 |  |  | $ | 17,255 |  |  | $ | 36,931 |  |  | $ | 0 |  |  | $ | 36,931 |  |  | $ | 17,255 |
TOTAL |  | $ | 14,051 |  |  | $ | 8,998 |  |  | $ | 17,255 |  |  | $ | 40,304 |  |  | $ | 31,060 |  |  | $ | 71,364 |  |  | $ | 17,255 |
(1) | The acquired loans include credit impaired loans (ASC 310-30 loans) and performing loans (pass graded loans acquired from Center at the time of merger).
We categorize loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. We analyze loans individually by classifying the loans as to credit risk. This analysis includes all non-homogeneous loans. This analysis is performed at least on a quarterly basis. We use the following definitions for risk ratings:
| • |  | Special Mention: Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.
| • |  | Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
| • |  | Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass-rated loans. As of March 31, 2012 and December 31, 2011, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
|  | As of March 31, 2012 |
|  | Special Mention |  |  | Substandard |  |  | Doubtful/Loss |  |  | Total |
|  | (In thousands) |
Legacy Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 0 |  |  | $ | 34 |  |  | $ | 0 |  |  | $ | 34 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 3,710 |  |  |  | 13,657 |  |  |  | 0 |  |  |  | 17,367 |
Hotel & Motel |  |  | 2,279 |  |  |  | 16,854 |  |  |  | 0 |  |  |  | 19,133 |
Gas Station & Car Wash |  |  | 3,484 |  |  |  | 5,994 |  |  |  | 0 |  |  |  | 9,478 |
Mixed Use |  |  | 2,224 |  |  |  | 5,319 |  |  |  | 0 |  |  |  | 7,543 |
Industrial & Warehouse |  |  | 3,976 |  |  |  | 8,245 |  |  |  | 398 |  |  |  | 12,619 |
Other |  |  | 11,326 |  |  |  | 12,486 |  |  |  | 0 |  |  |  | 23,812 |
Real estate - Construction |  |  | 0 |  |  |  | 1,723 |  |  |  | 0 |  |  |  | 1,723 |
Commercial business |  |  | 12,234 |  |  |  | 30,352 |  |  |  | 5,845 |  |  |  | 48,431 |
Trade finance |  |  | 516 |  |  |  | 4,727 |  |  |  | 0 |  |  |  | 5,243 |
Consumer and other |  |  | 0 |  |  |  | 1,521 |  |  |  | 0 |  |  |  | 1,521 |
Subtotal |  | $ | 39,749 |  |  | $ | 100,912 |  |  | $ | 6,243 |  |  | $ | 146,904 |
Acquired Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 13,101 |  |  |  | 11,671 |  |  |  | 0 |  |  |  | 24,772 |
Hotel & Motel |  |  | 16,870 |  |  |  | 23,280 |  |  |  | 0 |  |  |  | 40,150 |
Gas Station & Car Wash |  |  | 5,696 |  |  |  | 5,892 |  |  |  | 0 |  |  |  | 11,588 |
Mixed Use |  |  | 2,467 |  |  |  | 4,184 |  |  |  | 0 |  |  |  | 6,651 |
Industrial & Warehouse |  |  | 3,675 |  |  |  | 6,821 |  |  |  | 0 |  |  |  | 10,496 |
Other |  |  | 6,704 |  |  |  | 13,161 |  |  |  | 0 |  |  |  | 19,865 |
Real estate - Construction |  |  | 0 |  |  |  | 7,514 |  |  |  | 0 |  |  |  | 7,514 |
Commercial business |  |  | 18,486 |  |  |  | 32,853 |  |  |  | 210 |  |  |  | 51,549 |
Trade finance |  |  | 284 |  |  |  | 589 |  |  |  | 0 |  |  |  | 873 |
Consumer and other |  |  | 649 |  |  |  | 3,941 |  |  |  | 341 |  |  |  | 4,931 |
Subtotal |  | $ | 67,932 |  |  | $ | 109,906 |  |  | $ | 551 |  |  | $ | 178,389 |
Total |  | $ | 107,681 |  |  | $ | 210,818 |  |  | $ | 6,794 |  |  | $ | 325,293 |
|  | As of December 31, 2011 |
|  | Special Mention |  |  | Substandard |  |  | Doubtful/Loss |  |  | Total |
|  | (In thousands) |
Legacy Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 0 |  |  | $ | 36 |  |  | $ | 0 |  |  | $ | 36 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 3,430 |  |  |  | 13,477 |  |  |  | 0 |  |  |  | 16,907 |
Hotel & Motel |  |  | 5,008 |  |  |  | 17,875 |  |  |  | 0 |  |  |  | 22,883 |
Gas Station & Car Wash |  |  | 3,489 |  |  |  | 2,554 |  |  |  | 0 |  |  |  | 6,043 |
Mixed Use |  |  | 2,279 |  |  |  | 3,026 |  |  |  | 0 |  |  |  | 5,305 |
Industrial & Warehouse |  |  | 3,998 |  |  |  | 7,238 |  |  |  | 404 |  |  |  | 11,640 |
Other |  |  | 5,914 |  |  |  | 15,393 |  |  |  | 0 |  |  |  | 21,307 |
Real estate - Construction |  |  | 0 |  |  |  | 1,848 |  |  |  | 0 |  |  |  | 1,848 |
Commercial business |  |  | 11,357 |  |  |  | 30,114 |  |  |  | 5,994 |  |  |  | 47,465 |
Trade finance |  |  | 274 |  |  |  | 4,997 |  |  |  | 0 |  |  |  | 5,271 |
Consumer and other |  |  | 0 |  |  |  | 1,081 |  |  |  | 0 |  |  |  | 1,081 |
Subtotal |  | $ | 35,749 |  |  | $ | 97,639 |  |  | $ | 6,398 |  |  | $ | 139,786 |
Acquired Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate - Residential |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Real estate - Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  |  | 11,591 |  |  |  | 11,334 |  |  |  | 0 |  |  |  | 22,925 |
Hotel & Motel |  |  | 13,138 |  |  |  | 16,746 |  |  |  | 0 |  |  |  | 29,884 |
Gas Station & Car Wash |  |  | 5,665 |  |  |  | 5,760 |  |  |  | 0 |  |  |  | 11,425 |
Mixed Use |  |  | 3,532 |  |  |  | 2,829 |  |  |  | 0 |  |  |  | 6,361 |
Industrial & Warehouse |  |  | 2,673 |  |  |  | 3,770 |  |  |  | 0 |  |  |  | 6,443 |
Other |  |  | 6,702 |  |  |  | 12,598 |  |  |  | 0 |  |  |  | 19,300 |
Real estate - Construction |  |  | 0 |  |  |  | 5,489 |  |  |  | 0 |  |  |  | 5,489 |
Commercial business |  |  | 16,096 |  |  |  | 39,630 |  |  |  | 353 |  |  |  | 56,079 |
Trade finance |  |  | 128 |  |  |  | 829 |  |  |  | 0 |  |  |  | 957 |
Consumer and other |  |  | 1,662 |  |  |  | 2,526 |  |  |  | 0 |  |  |  | 4,188 |
Subtotal |  | $ | 61,187 |  |  | $ | 101,511 |  |  | $ | 353 |  |  | $ | 163,051 |
Total |  | $ | 96,936 |  |  | $ | 199,150 |  |  | $ | 6,751 |  |  | $ | 302,837 |
The following table presents loans sold from loans held for investment during the three months ended March 31, 2012 and 2011 by portfolio segment:
|  | Real estate - Commercial |  |  | Real estate - Construction |  |  | Commercial Business |  |  | Total |
|  | (In thousands) |
March 31, 2012: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales or reclassification to held for sale |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
March 31, 2011: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Sales or reclassification to held for sale |  | $ | 2,713 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 2,713 |
The adequacy of the allowance for loan losses is determined by management based upon an evaluation and review of the credit quality of the loan portfolio, consideration of historical loan loss experience, relevant internal and external factors that affect the collection of a loan, and other pertinent factors. The Migration Analysis is a formula methodology based on the Bank's actual historical net charge-off experience for each loan pool and loan risk grade (Pass, Special Mention, Substandard and Doubtful). The migration analysis is centered on the Bank's internal credit risk rating system. Our internal loan review and external contracted credit review examinations are used to determine and validate loan risk grades. This credit review system takes into consideration factors such as: borrower's background and experience; historical and current financial condition; credit history and payment performance; economic conditions and their impact on various industries; type, fair value and volatility of the fair value of collateral; lien position; and the financial strength of any guarantors. A general loan loss allowance is provided on loans not specifically identified as impaired ("non-impaired loans"). The allowance is determined first based on a quantitative analysis using a loss migration methodology. The loans are classified by type and loan grade, and the historical loss migration is tracked for the various stratifications. Loss experience is quantified for the most recent 12 quarters and then weighted to give more weight to the most recent losses. That loss experience is then applied to the stratified portfolio at each quarter end. For the Performing Loans acquired from Center, a general loan loss allowance is provided to the extent that there has been credit deterioration since the acquisition. The estimate of that credit deterioration becomes more evident as time passes since the acquisition. As of March 31, 2012, the historical loss experience from Center was utilized to provide for a nominal allowance. The quantitative general loan loss allowance was $19.5 million ($19.1 million for legacy loans and $348 thousand for acquired loans) at March 31, 2012, compared to $20.4 million at December 31, 2011. Additionally, in order to systematically quantify the credit risk impact of other trends and changes within the loan portfolio, the Bank utilizes qualitative adjustments to the Migration Analysis within established parameters. The parameters for making adjustments are established under a Credit Risk Matrix that provides seven possible scenarios for each of the factors below. The matrix allows for up to three positive (Major, Moderate, and Minor), three negative (Major, Moderate, and Minor), and one neutral credit risk scenarios within each factor for each loan type pool. Generally, the factors are considered to have no significant impact (neutral) to our historical migration ratios. However, if information exists to warrant adjustment to the Migration Analysis, changes are made in accordance with the established parameters supported by narrative and/or statistical analysis. The Credit Risk Matrix and the nine possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio or individual specific reserve allocations by as much as 50 basis points in either direction (positive or negative) for each loan type pool. This matrix considers the following nine factors, which are patterned after the guidelines provided under the FFIEC Interagency Policy Statement on the Allowance for Loan and Lease Losses:
| • |  | Changes in lending policies and procedures, including underwriting standards and collection, charge-off, and recovery practices.
| • |  | Changes in national and local economic and business conditions and developments, including the condition of various market segments.
| • |  | Changes in the nature and volume of the loan portfolio.
| • |  | Changes in the experience, ability, and depth of lending management and staff.
| • |  | Changes in the trends of the volume and severity of past due and classified loans; and changes in trends in the volume of non-accrual loans and troubled debt restructurings, and other loan modifications.
| • |  | Changes in the quality of our loan review system and the degree of oversight by the Directors.
| • |  | Changes in the value of underlying collateral for collateral-dependent loans.
| • |  | The existence and effect of any concentrations of credit, and changes in the level of such concentrations.
| • |  | The effect of external factors such as competition and legal and regulatory requirements on the level of estimated losses in our loan portfolio.
The qualitative loan loss allowance on the loan portfolio was $25.6 million at March 31, 2012, compared to $23.5 million at December 31, 2011. We also establish specific loss allowances for loans where we have identified potential credit risk conditions or circumstances related to a specific individual credit. The specific allowance amounts are determined by a method prescribed by FASB ASC 310-10-35-22, Measurement of Impairment. The loans identified as impaired will be accounted for in accordance with one of the three acceptable valuation methods: 1) the present value of future cash flows discounted at the loan's effective interest rate; 2) the loan's observable market price; or 3) the fair value of the collateral, if the loan is collateral dependent. For the collateral dependent impaired loans, we obtain a new appraisal to determine the amount of impairment as of the date that the loan become impaired. The appraisals are based on an "as is" valuation. To ensure that appraised values remain current, we generally obtain an updated appraisal every twelve months from a qualified independent appraiser. Furthermore, if the most current appraisal is dated more than six months prior to the effective date of the impairment test, we validate the most current value with third party market data appropriate to the location and property type of the collateral. If the third party market data indicates that the value of our collateral property has declined since the most recent valuation date, we adjust the value of the property downward to reflect current market conditions. If the fair value of the collateral, less cost to sell, is less than the recorded amount of the loan, we then recognize impairment by creating or adjusting an existing valuation allowance with a corresponding charge to the provision for loan losses. If an impaired loan is expected to be collected through liquidation of the collateral, the loan is deemed to be collateral dependent and the amount of impairment is charged off against the allowance for loan losses. The Bank considers a loan to be impaired when it is probable that not all amounts due (principal and interest) will be collectible in accordance with the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls is determined on a case-by-case basis by taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower's prior payment record and the amount of the shortfall in relation to the principal and interest owed. For commercial business loans, real estate loans and certain consumer loans, we base the measurement of loan impairment on the present value of the expected future cash flows, discounted at the loan's effective interest rate or on the fair value of the loan's collateral if the loan is collateral dependent. We evaluate most consumer loans for impairment on a collective basis, because these loans have generally smaller balances and are homogeneous in the underwriting terms and conditions, and in the type of collateral. If a loan is deemed to be impaired, the amount of the impairment is supported by a specific allowance amount which is included in the allowance for loan losses through a charge to the provision for loan losses. Impaired loans at March 31, 2012, were $99.8 million, a net increase of $17.7 million from $82.1 million at December 31, 2011. This net increase in impaired loans is due primarily to three commercial real estate (CRE) loans, aggregating $9.9 million, which were placed on non-accrual status and three loans, two CRE and one C&I, totaling $5.4 million, which were restructured. For our Credit Impaired Loans, our allowance for loan losses is estimated based upon our expected cash flows for these loans. To the extent that we experience a deterioration in borrower credit quality resulting in a decrease in our expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on our estimate of future credit losses over the remaining life of the loans. The following table presents loans by portfolio segment and impairment method at March 31, 2012 and December 31, 2011:
|  | As of March 31, 2012 |
|  | Real estate - Residential |  |  | Real estate - Commercial |  |  | Real estate - Construction |  |  | Commercial business |  |  | Trade finance |  |  | Consumer and other |  |  | Total |
|  | (In Thousands) |
Impaired loans |  | $ | 0 |  |  | $ | 64,508 |  |  | $ | 1,710 |  |  | $ | 28,244 |  |  | $ | 4,702 |  |  | $ | 624 |  |  | $ | 99,788 |
Specific allowance |  | $ | 0 |  |  | $ | 7,297 |  |  | $ | 0 |  |  | $ | 8,675 |  |  | $ | 1 |  |  | $ | 479 |  |  | $ | 16,452 |
Loss coverage ratio |  |  | 0.0 | % |  |  | 11.3 | % |  |  | 0.0 | % |  |  | 30.7 | % |  |  | 0.0 | % |  |  | 76.8 | % |  |  | 16.5 | %
Non-impaired loans |  | $ | 1,995 |  |  | $ | 2,562,022 |  |  | $ | 46,354 |  |  | $ | 818,063 |  |  | $ | 148,002 |  |  | $ | 63,471 |  |  | $ | 3,639,907 |
General allowance |  | $ | 9 |  |  | $ | 29,406 |  |  | $ | 640 |  |  | $ | 13,433 |  |  | $ | 1,838 |  |  | $ | 531 |  |  | $ | 45,857 |
Loss coverage ratio |  |  | 0.5 | % |  |  | 1.1 | % |  |  | 1.4 | % |  |  | 1.6 | % |  |  | 1.2 | % |  |  | 0.8 | % |  |  | 1.3 | %
Total loans |  | $ | 1,995 |  |  | $ | 2,626,530 |  |  | $ | 48,064 |  |  | $ | 846,307 |  |  | $ | 152,704 |  |  | $ | 64,095 |  |  | $ | 3,739,695 |
Total allowance for loan losses |  | $ | 9 |  |  | $ | 36,703 |  |  | $ | 640 |  |  | $ | 22,108 |  |  | $ | 1,839 |  |  | $ | 1,010 |  |  | $ | 62,309 |
Loss coverage ratio |  |  | 0.5 | % |  |  | 1.4 | % |  |  | 1.3 | % |  |  | 2.6 | % |  |  | 1.2 | % |  |  | 1.6 | % |  |  | 1.7 | %
|  | As of December 31, 2011 |
|  | Real estate - Residential |  |  | Real estate - Commercial |  |  | Real estate - Construction |  |  | Commercial business |  |  | Trade finance |  |  | Consumer and other |  |  | Total |
|  | (In Thousands) |
Impaired loans |  | $ | 0 |  |  | $ | 49,904 |  |  | $ | 1,848 |  |  | $ | 25,150 |  |  | $ | 4,997 |  |  | $ | 150 |  |  | $ | 82,049 |
Specific allowance |  | $ | 0 |  |  | $ | 10,476 |  |  | $ | 49 |  |  | $ | 7,168 |  |  | $ | 342 |  |  | $ | 0 |  |  | $ | 18,035 |
Loss coverage ratio |  |  | 0.0 | % |  |  | 21.0 | % |  |  | 2.7 | % |  |  | 28.5 | % |  |  | 6.8 | % |  |  | 0.0 | % |  |  | 22.0 | %
Non-impaired loans |  | $ | 2,043 |  |  | $ | 2,581,976 |  |  | $ | 42,908 |  |  | $ | 824,426 |  |  | $ | 141,687 |  |  | $ | 66,482 |  |  | $ | 3,659,522 |
General allowance |  | $ | 9 |  |  | $ | 27,831 |  |  | $ | 675 |  |  | $ | 13,513 |  |  | $ | 1,444 |  |  | $ | 445 |  |  | $ | 43,917 |
Loss coverage ratio |  |  | 0.4 | % |  |  | 1.1 | % |  |  | 1.6 | % |  |  | 1.6 | % |  |  | 1.0 | % |  |  | 0.7 | % |  |  | 1.2 | %
Total loans |  | $ | 2,043 |  |  | $ | 2,631,880 |  |  | $ | 44,756 |  |  | $ | 849,576 |  |  | $ | 146,684 |  |  | $ | 66,632 |  |  | $ | 3,741,571 |
Total allowance for loan losses |  | $ | 9 |  |  | $ | 38,307 |  |  | $ | 724 |  |  | $ | 20,681 |  |  | $ | 1,786 |  |  | $ | 445 |  |  | $ | 61,952 |
Loss coverage ratio |  |  | 0.4 | % |  |  | 1.5 | % |  |  | 1.6 | % |  |  | 2.4 | % |  |  | 1.2 | % |  |  | 0.7 | % |  |  | 1.7 | %
Under certain circumstances, we provide borrowers relief through loan modifications. These modifications are either temporary in nature ("temporary modifications"), or are more substantive troubled debt restructurings. At March 31, 2012, total modified loans were $43.7 million, compared to $32.7 million at December 31, 2011. The temporary modifications generally consist of interest only payments for a three- to six- month period, whereby principal payments are deferred. At the end of the modification period, the remaining principal balance is re-amortized based on the original maturity date. Loans subject to temporary modifications are generally downgraded to Substandard or Special Mention. At the end of the modification period, the loan either 1) returns to the original contractual terms; 2) is further modified and accounted for as a troubled debt restructuring in accordance with ASC 310-10-35; or 3) is disposed of through foreclosure or liquidation. Troubled Debt Restructured ("TDR") loans are defined by ASC 310-40, "Troubled Debt Restructurings by Creditors" and ASC 470-60, "Troubled Debt Restructurings by Debtors," and evaluated for impairment in accordance with ASC 310-10-35. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy. A summary of TDRs on accrual and non-accrual by type of concession as of March 31, 2012 and December 31, 2011 is presented below:
|  | As of March 31, 2012 |
|  | TDR on accrual |  |  | TDR on non-accrual |  |  |  |
(In thousands) |  | Real estate - Commercial |  |  | Commercial Business |  |  | Trade Finance |  |  | Total |  |  | Real estate - Commercial |  |  | Commercial Business |  |  | Consumer & Other |  |  | Total |  |  | TOTAL |
Payment concession |  | $ | 2,230 |  |  | $ | 1,578 |  |  | $ | 442 |  |  | $ | 4,250 |  |  | $ | 9,729 |  |  | $ | 3,790 |  |  | $ | 0 |  |  | $ | 13,519 |  |  | $ | 17,769 |
Maturity / Amortization concession |  |  | 0 |  |  |  | 2,899 |  |  |  | 0 |  |  |  | 2,899 |  |  |  | 963 |  |  |  | 1,450 |  |  |  | 145 |  |  |  | 2,558 |  |  |  | 5,457 |
Rate concession |  |  | 14,389 |  |  |  | 2,637 |  |  |  | 0 |  |  |  | 17,026 |  |  |  | 3,320 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,320 |  |  |  | 20,346 |
Principal forgiveness |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 112 |  |  |  | 0 |  |  |  | 112 |  |  |  | 112 |
|  | $ | 16,619 |  |  | $ | 7,114 |  |  | $ | 442 |  |  | $ | 24,175 |  |  | $ | 14,012 |  |  | $ | 5,352 |  |  | $ | 145 |  |  | $ | 19,509 |  |  | $ | 43,684 |
|  | As of December 31, 2011 |
|  | TDR on accrual |  |  | TDR on non-accrual |  |  |  |
(In thousands) |  | Real estate - Commercial |  |  | Commercial Business |  |  | Trade Finance |  |  | Total |  |  | Real estate - Commercial |  |  | Commercial Business |  |  | Trade Finance and Other |  |  | Total |  |  | TOTAL |
Payment concession |  | $ | 949 |  |  | $ | 1,365 |  |  | $ | 0 |  |  | $ | 2,314 |  |  | $ | 3,769 |  |  | $ | 3,441 |  |  | $ | 0 |  |  | $ | 7,210 |  |  | $ | 9,524 |
Maturity / Amortization concession |  |  | 0 |  |  |  | 888 |  |  |  | 469 |  |  |  | 1,357 |  |  |  | 1,178 |  |  |  | 1,578 |  |  |  | 150 |  |  |  | 2,906 |  |  |  | 4,263 |
Rate concession |  |  | 12,384 |  |  |  | 2,740 |  |  |  | 0 |  |  |  | 15,124 |  |  |  | 3,335 |  |  |  | 396 |  |  |  | 0 |  |  |  | 3,731 |  |  |  | 18,855 |
Principal forgiveness |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 78 |  |  |  | 0 |  |  |  | 78 |  |  |  | 78 |
|  | $ | 13,333 |  |  | $ | 4,993 |  |  | $ | 469 |  |  | $ | 18,795 |  |  | $ | 8,282 |  |  | $ | 5,493 |  |  | $ | 150 |  |  | $ | 13,925 |  |  | $ | 32,720 |
TDRs on accrual status are comprised of loans that were accruing at the time of restructuring and for which the Bank anticipates full repayment of both principal and interest. TDRs that are on non-accrual can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments as modified. Sustained performance includes the periods prior to the modification if the prior performance met or exceeded the modified terms. TDRs on accrual status at March 31, 2012 were comprised of 10 commercial real estate loans totaling $16.4 million and 25 commercial business loans totaling $7.1 million. TDRs on accrual status at December 31, 2011 were comprised of 6 commercial real estate loans totaling $13.3 million and 19 commercial business loans totaling $5.0 million. We expect that the TDRs on accrual status as of March 31, 2012, which are all performing in accordance with their restructured terms, to continue to comply with the restructured terms because of the reduced principal or interest payments on these loans. TDRs that were restructured at market interest rates and had sustained performance as agreed under the modified loan terms may be reclassified as non-TDRs after each year end. The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended March 31, 2012:
(In thousands) |  | Number of Loans |  |  | Pre- Modification |  |  | Post- Modification |
Real estate - Commercial |  |  |  |
Retail |  |  | 4 |  |  | $ | 903 |  |  | $ | 906 |
Hotel & Motel |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Gas Station & Car Wash |  |  | 1 |  |  |  | 218 |  |  |  | 217 |
Mixed Use |  |  | 1 |  |  |  | 2,319 |  |  |  | 2,317 |
Industrial & Warehouse |  |  | 1 |  |  |  | 1,064 |  |  |  | 1,064 |
Other |  |  | 2 |  |  |  | 7,335 |  |  |  | 5,733 |
Real estate - Construction |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial business |  |  | 8 |  |  |  | 2,538 |  |  |  | 2,524 |
Total |  |  | 17 |  |  | $ | 14,377 |  |  | $ | 12,761 |
The specific reserves for the troubled debt restructurings described above as of March 31, 2012 was $1.3 million and the charge offs for the three months ended March 31, 2012 was $1.7 million. The following table presents loans by class for TDR loans that have been modified within the previous twelve months and have subsequently had a payment default during the three months ended March 31, 2012:
|  | Number of Loans |  |  | Balance |
|  | (In thousands) |
Real estate - Commercial |  |  |  |
Retail |  |  | 1 |  |  | $ | 258 |
Industrial & Warehouse |  |  | 2 |  |  |  | 1,102 |
Other |  |  | 2 |  |  |  | 1,031 |
Commercial Business |  |  | 7 |  |  |  | 2,883 |
|  |  | 12 |  |  | $ | 5,274 |
A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. The specific reserves for the troubled debt restructurings described above as of March 31, 2012 was $472 thousand and the charge offs for the three months ended March 31, 2012 was $0. We have allocated $7.2 million and $6.4 million of specific reserves to TDRs as of March 31, 2012 and December 31, 2011, respectively. As of March 31, 2012 and December 31, 2011, we did not have any outstanding commitments to extend additional funds to these borrowers. Covered Loans On April 16, 2010, the Department of Financial Institutions closed Innovative Bank, California, and appointed the FDIC as its receiver. On the same date, Center Bank assumed the banking operations of Innovative Bank from the FDIC under a purchase and assumption agreement and two related loss sharing agreements with the FDIC. Upon the merger between Nara Bancorp and Center Financial, the Company assumed the loss sharing agreements with the FDIC. Covered nonperforming assets totaled $3.7 million and $3.6 million at March 31, 2012 and December 31, 2011, respectively. These covered nonperforming assets are subject to the loss sharing agreements with the FDIC. The covered nonperforming assets at March 31, 2012 and December 31, 2011 were as follows:
(in thousands) |  | March 31, 2012 |  |  | December 31, 2011 |
Covered loans on non-accrual status |  | $ | 0 |  |  | $ | 0 |
Covered other real estate owned |  |  | 3,677 |  |  |  | 3,575 |
Total covered nonperforming assets |  | $ | 3,677 |  |  | $ | 3,575 |
Acquired covered loans |  | $ | 78,748 |  |  | $ | 89,959 |
Loans accounted for under ASC 310-30 are generally considered accruing and performing loans and the accretable discount is accreted to interest income over the estimate life of the loan when cash flows are reasonably estimable. Accordingly, acquired impaired loans that are contractually past due are still considered to be accruing loans. The loans may be classified as nonaccrual if the timing and amount of future cash flows is not reasonably estimable.

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